Sasol seeks joint venture with Texas chemical company

A proposed joint venture between a
local petrochemical plant and another in Texas could bring polyethylene
production to Southwest
Louisiana.

Sasol, the South African petrochemical
company based locally in Westlake, announced it has signed a memorandum
of understanding
with INEOS Olefins & Polymers USA of Clear Lake, Texas, to
seek a possible joint venture to produce high-density polyethylene.

“It’s the terms of agreement under
which we hope to build a joint venture,” said Michael Hayes, Sasol’s
public affairs manager
for U.S. megaprojects. “It’s a 50-50 joint venture. Each partner
is going to provide its share of ethylene as a raw material.”

Hayes said the site for the high-density polyethylene production has yet to be determined. He added that it would either be
in Southwest Louisiana or Texas.

The announcement comes in the midst of a week in which Sasol officials formally unveiled plans for their multibillion-dollar
ethane cracker and gas-to-liquids complex to area residents.

The complex, which is in the permitting
process with the state Department of Environmental Quality and the U.S.
Army Corps
of Engineers, is expected to produce about 1.5 million tons of
ethylene each year and more than 96,000 barrels of liquid fuels
and chemicals each day.

Under the joint venture agreement,
Sasol would provide INEOS with ethylene from its proposed ethane cracker
to produce high-density
polyethylene, which would be used to manufacture goods such as
storm drain pipe, film and blow molding, Hayes said.

“We will both take our share of the products and market them independently,” he said. “We intend to have a very tight grade
slate on the set of products we make so we will get high efficiencies on the product.”

INEOS’ website touts the company as
“the sixth largest supplier of ethylene, propylene, high density
polyethylene and polypropylene
to the North American marketplace.”

“We are a merchant ethylene producer and seller,” said Charles Saunders, legal and external affairs representative for INEOS.
“We also already have high-density polyethylene assets on the Houston ship channel.”